European Central Bank — Close cooperation within the Single Supervisory Mechanism with non-euro EU countries

 

SUMMARY OF:

Regulation (EU) No 1024/2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (SSM regulation)

Regulation (EU) No 468/2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM framework regulation) (ECB/2014/17)

Decision 2014/434/EU on the close cooperation with the national competent authorities of participating Member States whose currency is not the euro (ECB/2014/5) (ECB decision on close cooperation)

Decision (EU) 2020/1015 establishing close cooperation between the European Central Bank and Българска народна банка (Bulgarian National Bank) (ECB/2020/30)

Decision (EU) 2020/1016 establishing close cooperation between the European Central Bank and Hrvatska Narodna Banka (ECB/2020/31)

WHAT IS THE AIM OF THE LEGISLATION?

It establishes the principles and procedures for close cooperation within the Single Supervisory Mechanism (SSM) between the European Central Bank (ECB) and EU Member States whose currency is not the euro.

Bulgaria and Croatia are the first two non-euro-area EU Member States that have entered into close cooperation starting on 1 October 2020.

KEY POINTS

The European system of banking supervision (SSM) was established as the system of banking supervision composed of the ECB and national competent authorities (NCAs) of participating Member States to ensure safe and sound banks, a stable and integrated financial system and the consistent supervision of all banks. All euro-area countries participate automatically in European banking supervision.

Member States whose currency is not the euro can participate in the SSM by requesting the establishment of close cooperation between the ECB and their NCA. Once close cooperation has been established, these Member States can join both the SSM and the Single Resolution Mechanism, which ensures an orderly resolution of failing banks.

Under the close cooperation, the NCAs are obliged to adopt any measure in relation to supervised entities at the request of the ECB. The legal acts adopted by the ECB are binding and enforceable and the NCAs must provide the ECB with all information necessary for the purposes of carrying out the tasks conferred on it within the SSM.

The SSM regulation, the SSM framework regulation and the ECB decision on close cooperation describe the process of establishing close cooperation and how it works.

Steps for the establishment of close cooperation:

Supervision under close cooperation.

Suspension or termination of close cooperation:

The establishment of close cooperation contributes to the safety and soundness of banks and fosters the process of financial integration across the single market.

FROM WHEN DOES THE LEGISLATION APPLY?

BACKGROUND

For more information, see:

MAIN DOCUMENTS

Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, pp. 63-89)

Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation) (ECB/2014/17) (OJ L 141, 14.5.2014, pp. 1-50)

Decision 2014/434/EU of the European Central Bank of 31 January 2014 on the close cooperation with the national competent authorities of participating Member States whose currency is not the euro (SSM Regulation) (ECB/2014/5) (OJ L 198, 5.7.2014, pp. 7-13)

Decision (EU) 2020/1015 of the European Central Bank of 24 June 2020 on the establishment of close cooperation between the European Central Bank and Българска народна банка (Bulgarian National Bank) (ECB/2020/30) (OJ L 224I, 13.7.2020, pp. 1-3)

Decision (EU) 2020/1016 of the European Central Bank of 24 June 2020 on the establishment of close cooperation between the European Central Bank and Hrvatska Narodna Banka (ECB/2020/31) (OJ L 224I, 13.7.2020, pp. 4-6)

last update 03.03.2021